Effective vendor management for community associations

Wednesday October 16, 2024

An important aspect of serving on the board of your community association is vendor management. From selecting vendors to service your association, to maintaining relationships and ensuring vendors get paid for their work, it can feel like a complex task. But with the right vendor management tools and community association management partner, it doesn’t have to be.  

Why vendor management is crucial for community associations  

Community association vendor managementMost work that needs to be performed to maintain a community association is contracted out. While a board is elected to serve the best interests of the community, they certainly wouldn’t be joining if it also meant being responsible for cleaning the building, gardening, painting common areas, the list goes on.  

That’s why vendor management is a crucial aspect of board business. But it goes beyond selecting qualified vendors. Once you find a good vendor, you want to keep them. So, it’s important to build and maintain a strong relationship.  

Relationships with trusted vendors lead to service that not only you as a board can depend on but the residents of your community can too. When residents come across the cleaning crew on a consistent basis or see that a landscape company is regularly on site to maintain the community’s curb appeal, they feel confident that their association board and management company are doing what it needs to do to maintain the community.   

Key elements of successful vendor management  

Clear expectations 

First and foremost, the board needs to set clear expectations and requirements for vendors. Ahead of looking for a vendor, you need to be in total agreement of what’s expected of that vendor to meet the needs of your community. For example, if cleaning is something that requires a third-party vendor, you need to determine what type of service you need. How large is your building? How many cleaners would be required? How often do you expect the service? Daily? Two or three times weekly?  

To best understand if a vendor will be able to meet your needs, they need to know what they are upfront. A good vendor understands your association's vision, and executes quality work, on time and on budget.  

Streamline the bidding process  

Part of your bid package in the tendering process should include a scope of work and a template that’s the same for everyone bidding on the job. Your scope of work should focus on specifications for each phase of the project. That would include required materials, tools and equipment, expected completion of the project and/or phases of the work, project costs, expectations for each party and a clean-up schedule. 
 
As well, you’ll want to be clear about what the process is if the scope of work changes, or an emergency arises. And finally, all bids should include references, proposed warranties and guarantees.   
 
We manage the process of standardization by setting clear and reasonable expectations about how and when the job is to be completed, vendor insurance requirements, and any important considerations on how work is to be performed.  

Get your docs in a row 

Part of your process requires gathering certain documents from each vendor. Your community association manager can help you draw up a list that you can include in the tender package. And don’t forget consistency. Each vendor needs to receive and provide the same documentation. 
You’ll want: 

  • Vendor documentation checklistthe vendor’s qualifications 

  • previous experience 

  • past projects 

  • any subcontractors 

  • all applicable certifications 

  • proof of insurance (type, coverage, and expiry date)   

Choosing the right vendor for your community association 

Establish criteria for vendor selection  

Ahead of reviewing vendor bids, you need to establish the criteria you will use to make your decision. Of the information you’ve required they submit, which will be the most important? One way to do this is to prioritize the criteria and assign a percentage to it. For example, qualifications might be worth 20%, previous experience and past projects worth 50%, and pricing worth 30%.  

Without deciding on set criteria, the job of coming to a consensus and selecting a vendor will be extremely difficult.  

Price is just a small part of the equation 

Informed decision-making involves more than just costs. Financial stewardship is important, however, the vendor you hire must also have the same values you do for your association. Ask yourself whether they’re just there to get the job done and move on to the next, or do they care about the quality of their work? Do they pay attention to detail? What kind of value do you want your vendor to bring to your community? 
 
Finding a vendor that’s right for your community means finding a combination of knowledge, experience, service excellence, responsiveness and cost. Keeping more than the least expensive option in mind when hiring a vendor is more cost-effective than the lowest bidder. 
 
At FirstService Residential, we research to choose vendors with prior experience, an established track record and one that will best meet the association's needs. We have preferred vendors that can do any job, or an association can choose their own. 

It pays to be diligent 

Building extra time into your vendor selection process to get to know the vendor you’re strongly considering for a project. Speak to the vendor’s references, former clients, and conduct a quick online search as well. People are usually willing to provide a review on the vendor you’re thinking of, and you’ll get the unvarnished truth. 

Streamlining vendor communication and documentation  

Vendor management softwareMembers serving on the board change, and as new people join the board, they need to be able to easily access information on current vendors, past vendors, previous projects, and more. Meaning that streamlining communication and documentation is an important aspect of vendor management.  

If you’re partnered with a professional property management company, this is something they should be able to assist you with. For example, FirstService Residential Connect™, our proprietary software for property management is designed to allow a customized view that lets you quickly manage community business, such as making payments, initiating work orders, tracking violations, accessing financial information and more. We work with our clients to ensure all the documents are uploaded to Connect to enable efficient document management. Connect can also be used for easy and secure communication to vendors. Keeping all important vendor information in one place.  

Look to your community association management company for support  

The important task of choosing vendors will always fall to the board. But a lot of the tasks associated with vendor management can fall to your community association management company. Of course they can provide you with a list of preferred, well-vetted vendors to work with but if you decide to seek out other vendors they can help you with that process.  

In the event you decide to look for additional vendors, your management team can assist you with streamlining your bidding process, can act as the main contact for vendors to send their bids to, and provide guidance throughout your selection process.  

And with all vendors, preferred or new, your community association management will help with contract negotiation and ensure your vendors get paid on time. An important step to maintaining a strong relationship with your vendors.   

Trusting a vendor to perform work in your association always involves risk. But understanding how to be effective in your vendor management, you can minimize those risks and reduce or eliminate any unknown.

Wednesday October 16, 2024